Today I write not to gloat. Given the pain that nearly
everyone is experiencing, that would be entirely inappropriate. Nor am
I writing to make further predictions, as most of my forecasts in previous
letters have unfolded or are in the process of unfolding. Instead, I am
writing to say goodbye.

Recently, on the front page of Section C of the Wall Street
Journal, a hedge fund manager who was also closing up shop (a $300 million
fund), was quoted as saying, “What I have learned about the hedge fund
business is that I hate it.” I could not agree more with that statement.
I was in this game for the money. The low hanging fruit, i.e. idiots whose
parents paid for prep school, Yale, and then the Harvard MBA, was there
for the taking. These people who were (often) truly not worthy of the education
they received (or supposedly received) rose to the top of companies such
as AIG, Bear Stearns and Lehman Brothers and all levels of our government.
All of this behavior supporting the Aristocracy only ended up making it
easier for me to find people stupid enough to take the other side of my
trades. God bless America.

There are far too many people for me to sincerely thank
for my success. However, I do not want to sound like a Hollywood actor
accepting an award. The money was reward enough. Furthermore, the endless
list of those deserving thanks know who they are.

I will no longer manage money for other people or institutions.
I have enough of my own wealth to manage. Some people, who think they have
arrived at a reasonable estimate of my net worth, might be surprised that
I would call it quits with such a small war chest. That is fine; I am content
with my rewards. Moreover, I will let others try to amass nine, ten or
eleven figure net worths. Meanwhile, their lives suck. Appointments back
to back, booked solid for the next three months, they lookforward to their
two week vacation in January during which they will likely be glued to
their Blackberries or other such devices. What is the point? They will
all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and
Larry Ellison will all be forgotten. I do not understand the legacy thing.
Nearly everyone will be forgotten. Give up on leaving your mark. Throw
the Blackberry away and enjoy life.

So this is it. With all due respect, I am dropping out.
Please do not expect any type of reply to emails or voicemails within normal
time frames or at all. Andy Springer and his company will be handling the
dissolution of the fund. And don’t worry about my employees, they were
always employed by Mr. Springer’s company and only one (who has been well-rewarded)
will lose his job.

I have no interest in any deals in which anyone would
like me to participate. I truly do not have a strong opinion about any
market right now, other than to say that things will continue to get worse
for some time, probably years. I am content sitting on the sidelines and
waiting. After all, sitting and waiting is how we made money from the subprime
debacle. I now have time to repair my health, which was destroyed by the
stress I layered onto myself over the past two years, as well as my entire
life – where I had to compete for spaces in universities and graduate schools,
jobs and assets under management – with those who had all the advantages
(rich parents) that I did not. May meritocracy be part of a new form of
government, which needs to be established.

On the issue of the U.S. Government, I would like to make
a modest proposal. First, I point out the obvious flaws, whereby legislation
was repeatedly brought forth to Congress over the past eight years, which
would have reigned in the predatory lending practices of now mostly defunct
institutions. These institutions regularly filled the coffers of both parties
in return for voting down all of this legislation designed to protect the
common citizen. This is an outrage, yet no one seems to know or care about
it. Since Thomas Jefferson and Adam Smith passed, I would argue that there
has been a dearth of worthy philosophers in this country, at least ones
focused on improving government. Capitalism worked for two hundred years,
but times change, and systems become corrupt. George Soros, a man of staggering
wealth, has stated that he would like to be remembered as a philosopher.
My suggestion is that this great man start and sponsor a forum for great
minds to come together to create a new system of government that truly
represents the common man’s interest, while at the same time creating rewards
great enough to attract the best and brightest minds to serve in government
roles without having to rely on corruption to further their interests or
lifestyles. This forum could be similar to the one used to create the operating
system, Linux, which competes with Microsoft’s near monopoly. I believe
there is an answer, but for now the system is clearly broken.

Lastly, while I still have an audience, I would like to
bring attention to an alternative food and energy source. You won’t see
it included in BP’s, “Feel good. We are working on sustainable solutions,”
television commercials, nor is it mentioned in ADM’s similar commercials.
But hemp has been used for at least 5,000 years for cloth and food, as
well as just about everything that is produced from petroleum products.
Hemp is not marijuana and vice versa. Hemp is the male plant and it grows
like a weed, hence the slang term. The original American flag was made
of hemp fiber and our Constitution was printed on paper made of hemp. It
was used as recently as World War II by the U.S. Government, and then promptly
made illegal after the war was won. At a time when rhetoric is flying about
becoming more self-sufficient in terms of energy, why is it illegal to
grow this plant in this country? Ah, the female. The evil female plant
– marijuana. It gets you high, it makes you laugh, it does not produce
a hangover. Unlike alcohol, it does not result in bar fights or wife beating.
So, why is this innocuous plant illegal? Is it a gateway drug? No, that
would be alcohol, which is so heavily advertised in this country. My only
conclusion as to why it is illegal, is that Corporate America, which owns
Congress, would rather sell you Paxil, Zoloft, Xanax and other addictive
drugs, than allow you to grow a plant in your home without some of the
profits going into their coffers. This policy is ludicrous. It has surely
contributed to our dependency on foreign energy sources. Our policies have
other countries literally laughing at our stupidity, most notably Canada,
as well as several European nations (both Eastern and Western). You would
not know this by paying attention to U.S. media sources though, as they
tend not to elaborate on who is laughing at the United States this week.
Please people, let’s stop the rhetoric and start thinking about how we
can truly become self-sufficient.

With that I say goodbye and good luck.

All the best,

Andrew Lahde

Bloomberg Article:

Lahde Quits Hedge Funds, Thanks `Idiots' for Success

By Katherine Burton

Oct. 17 (Bloomberg) -- Andrew Lahde, the hedge-fund manager
who quit after posting an 870 percent gain last year, said farewell to
clients in a letter that thanks stupid traders for making him rich and
ends with a plea to legalize marijuana.

Lahde, head of Santa Monica, California-based Lahde Capital
Management LLC, told investors last month he was returning their cash because
the risk of using credit derivatives -- his means of betting on the falling
value of bonds and loans, including subprime mortgages -- was too risky
given the weakness of the banks he was trading with.

``I was in this game for money,'' Lahde, 37, wrote in
a two-page letter today in which he said he had come to hate the hedge-fund
business. ``The low-hanging fruit, i.e. idiots whose parents paid for prep
school, Yale and then the Harvard MBA, was there for the taking. These
people who were (often) truly not worthy of the education they received
(or supposedly received) rose to the top of companies such as AIG, Bear
Stearns and Lehman Brothers and all levels of our government.

``All of this behavior supporting the Aristocracy, only
ended up making it easier for me to find people stupid enough to take the
other sides of my trades. God Bless America.''

Lahde, who managed about $80 million, told clients he'll
be content to invest his own money, rather than taking cash from wealthy
individuals and institutions and trying to amass a fortune worth hundreds
of millions or even billions of dollars.

``I do not understand the legacy thing,'' he wrote. ``Nearly
everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry
away and enjoy life.''

Request for Soros

He said he'd spend his time repairing his health ``as
well as my entire life -- where I had to compete for spaces at universities,
and graduate schools, jobs and assets under management -- with those who
had all the advantages (rich parents) that I did not.''

He also suggested that billionaire George Soros sponsor
a forum in which ``great minds'' would come together to create a new system
of government, as the current system ``is clearly broken.''

Lahde ended his letter with a plea for the increased use
of hemp as an alternative source of food and energy that segued into a
call for the legalization of marijuana.

``Hemp has been used for at least 5,000 years for cloth
and food, as well as just about everything that is produced from petroleum
products,'' he wrote. ``Hemp is not marijuana and vice versa. Hemp is the
male plant and it grows like a weed, hence the slang term.''

`Innocuous Plant'

He added, ``The evil female plant -- marijuana. It gets
you high, it makes you laugh, it does not produce a hangover. Unlike alcohol,
it does not result in bar fights or wife beating. So, why is this innocuous
plant illegal? Is it a gateway drug? No, that would be alcohol, which is
so heavily advertised in this country.''

Lahde said the only reason marijuana remains illegal is
because ``Corporate America, which owns Congress, would rather sell you
Paxil, Zoloft, Xanax and other addictive drugs, than allow you to grow
a plant in your home without some of the profits going into their coffers.''

Lahde graduated from Michigan State University with a
degree in finance and holds an MBA from the University of California, Los
Angeles. He worked at Los Angeles-based hedge fund Dalton Investments LLC
before founding his own firm two years ago with about $10 million.

Lahde wasn't available for comment. A woman at his firm,
who asked not to be identified, confirmed the authenticity of the letter.